By Pranav Sanghvi | 31 May 2024
India’s specialty chemicals sector has demonstrated exceptional growth in demand and capital generation on a global scale over the past decade. Positioned to assume a more prominent role in both consumption and production worldwide, India’s specialty chemicals industry is poised for significant expansion. Recent shifts in geopolitical dynamics have prompted many nations to prioritise self-reliance and localised supply chains. Comparing India’s manufacturing competitiveness to other major global chemical hubs reveals a strong foundation that could propel India into a leading position as a prime market for specialty chemicals manufacturing and their exports. This sets a promising stage for the success of cross-border marketplaces such as Atomgrid, facilitating growth and opportunities in the specialty chemicals sector and one of the many reasons why we felt compelled to invest in Atomgrid.
A Promising Future for Specialty Chemicals
The chemicals industry in India is poised for significant growth, with a market size estimation of $850-$1000 billion by 2040, accounting for 10-12% of the global chemicals market.1
According to McKinsey & Company1, the specialty chemicals segment will be the only one to see net exports by 2040. With net exports expected to rise by around 10 times, from ~$2 billion in 2021 to $21 billion in 2040.
Atomgrid – Targeting High-Profit Pools
Atomgrid is a managed marketplace that aims to disrupt the domestic and cross-border specialty chemicals industry. They aim to become the trusted digital factory for the procurement of specialty chemicals which provides the best quality at the right price and gives its customers digitally-enabled, value-added services. In simple terms, Atomgrid aims to become a one-stop solution for the specialty chemicals industry in India and globally.
The platform’s strategic positioning as a manufacturing partner for specialty chemicals, focussing on contract manufacturing & research, sets it apart from traditional distribution & sourcing models. By catering to medium and large-scale global manufacturers in the pharma & agrochemical sectors, Atomgrid targets high-profit pools and addresses key industry pain points such as supplier evaluation and technical expertise amongst numerous other aspects.
Merak's Perspective
Merak Ventures’ decision to invest in Atomgrid stems from a combination of factors. Firstly, Atomgrid boasts a strong founding team with diverse expertise and a clear understanding of the industry landscape. This, coupled with the market potential of the specialty chemicals sector in India and government initiatives like the Aatmanirbhar Bharat Abhiyan and certain Production Linked Incentive (PLI) schemes that favour this sector, creates a conducive environment for Atomgrid’s growth and success.
Atomgrid’s innovative approach to bridging the gap between suppliers and buyers positions it as a frontrunner in the evolving specialty chemicals marketplace landscape. With a clear vision, a robust business model and a commitment to excellence, Atomgrid embodies the essence of a promising investment opportunity in the specialty chemicals domain.
We are excited to be a part of Atomgrid's journey and look forward to witnessing their contribution to the growth of India's specialty chemicals sector.
1 “India: The next chemicals manufacturing hub” by McKinsey & Company (March 2023)